EUR weekly forecast

The Euro started the week on a downward trend against its counterparts as European Central Bank policymaker Martins Kazaks supported a June interest rate cut, ultimately weighing on EUR.

The Euro continued to stay on the defensive as it entered Tuesday's session, influenced by the release of Germany's latest producer price inflation data.

The index reported a 3.3% decline in PPI for April, surpassing the expected reading of 3.2%, leading to increased speculation that the ECB will implement multiple rate cuts this year. On Thursday, the single currency faced some mixed PMI data which served to hinder its performance.

The Eurozone's services index fell slightly below expectations but still stayed in expansion territory, whereas the manufacturing PMI continued to linger in contraction territory. The Euro ended the week on a weak note as ECB official Isabel Schnabel confirmed the likelihood of a June interest rate cut.

However, confirmation that the German economy grew in the first quarter of 2024 kept the EUR afloat on Friday. Looking ahead, the primary catalyst for movement in the Euro exchange rate this week is likely to be several data releases from within the Eurozone.

EUR exchange rates are expected to be buoyed on Monday by Germany's latest business confidence index, which is forecasted to increase.

On Wednesday, another disappointing reading of Germany's consumer confidence index could put pressure on the Euro, while the latest German inflation data might support the EUR if it indicates persistent inflationary pressures.

On Thursday, the forecasted slight rise in the Eurozone's economic sentiment index for May may provide some modest support for the single currency, along with the Eurozone's latest unemployment rate, which is expected to remain at record lows.

On Friday, the Eurozone's latest inflation data is anticipated to reveal signs of persistent inflation in its headline figure, potentially boosting the EUR at the end of the week.

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